Democratic Money

Frequently Asked Questions (FAQ)

What is Universal Basic Income (UBI)?

Universal Basic Income is the idea that everyone in the entire world should be paid every day, unconditionally, just because they exist. The best source of UBI explanations and information on the Internet is Scott Santen's Basic Income FAQ. If you are a leftie anarchist socialist social-justice radical type, you may enjoy Marcus Brancaglione's book, Universal Basic Income. I also highly recommend you read, listen and watch anything and everything by Karl Widerquist.

"What about Inflation"(TM)?

"Inflation" is used mostly as a fuzzy, derogatory term to attack the validity of a currency. When it is not used as a serious technical argument, the term is used in at least three different families of cultural objections:

In the first sense, it is used to indicate the potential of a central authority (say, a central bank) to issue an arbitrary amount of the currency at any time. Currencies in the Democratic Money Network have no central authority that can do that. The "central bank" of a Democratic Currency is a combination of identification procedures and time itself, so it cannot be randomly issued into oblivion.

In the second sense, an "inflationary" currency is one whose available monetary supply isn't guaranteed by physical or mathematical processes to be more or less fixed, and thus the currency is not a real currency. What that objetion really means is that "fixed-supply" currencies are attractive to people who just don't like to think about the effects of token issuance (such as devaluing their precious tokens, or lifting other people out of poverty without their approval and without any merit or "work" attached to it) and thus just want to rule out issuance entirely. It's nonsense.

In the third sense, an "inflationary" currency is an invalid currency because people can never value it, for whatever reasons. It assumes that people cannot just decide to value a currency out of their individual will. Instead, whether people will value a currency or not is determined not by themselves, but by properties inherent to the currency, i.e. what economic "backing" is baked into it, what kind of popular magical thinking does it tap on, or what violent state is forcing people to use it. It's nonsense.

But seriously, if everyone on Earth receives one token per day, isn't that inflationary?

The value of the unit of a currency (V) is determined by the total trade power ("capital") that backs it (T), divided by the total number of units in circulation (M):

V = T / M(this is the only equation, we promise!)

Users control T. You are responsible for increasing T. You can do so by acquiring trade power own your own. Just go out in the world, interact with real economies, and feed back what you can into the currency. You will do so if, when and how you decide to do so. That's the core value engine of every "cryptocurrency" (i.e. anarchic currency).

Users control M. If you think M is too high, you can destroy the currency after you receive it or purchase it. This is an integral part of the Democratic Money ethos. Democratic Money is not just about the token ruleset, but also about how it is to be used by existing people in the existing world.

Therefore, users control V -- it's not somehow implicit in the system's token issuance rules or determined by how societies or economies are supposed to work according to some model of the world.

So, no. What a democratic currency does not have is a mechanism to lower its value (V) if it is too high. But since the radical conception of an Universal Basic Income does not admit a "too high" value for an UBI, then that's not a problem, but a feature.

In the Democratic Money Network, the mechanisms of token inflation are population and time, and the mechanism of token deflaton is each individual user deciding to destroy the tokens they own for the benefit of all. If for whatever reason you are not happy with a token's current reading of its V parameter (the "token price on CoinMarketCap"), then just do something about it.

If there are multiple currencies in the network, how does one unit still represent a human daily basic income?

Strictly speaking, it doesn't. But it is important that all of them share the same currency issuance mechanism (constant issuance rate guaranteed for all users in perpetuity) and, ideally, all of them should issue exactly one (1) unit of their currency to every user, every day. The more consistent the token mechanics are across all currencies in the network, the better.

There is no way to determine how many currencies will exist in the network. It is entirely possible that, at some point in the future, we operate a single currency. If had a "Star Trek" society, the global "Federation" could run the currency as a "single anarchic entity," without the need for the existence of actual multiple operators.

Likewise, we do not attempt to predict the relative value of each currency implementation, as each one will have its own blockchain technology, software and IT deployment, its own bandwidth and costs and its own identification system with its own market coverage, costs and degree of cheat-resistance, etc. Actual market values can vary wildly, by orders of magnitude, among different currencies.

And to top it off, we cannot predict what will be the rate of duplicate sign-ups across different currencies. Even if individual currencies have checks to avoid duplicate user registration (as they should), the network does not need to prevent users from signing up to multiple currencies. If there are 1,000 currencies in the network, an user could register in all of them. It is possible that some, most or all currency operators may end up developing technical ways to query each others' databases and to force users to choose a single currency, but it is not clear whether that would ever be desirable or worth it (I think neither).

In case there are, for example, 1,000 currencies in the network, and each user is registered in all of them, that can be measured and society can respond by resignifying the average, sybolic value of "one token" to mean 1/1,000 of the average human's daily basic income. Thus, the unit of account symbolizing "the daily income of the human being" is meta-symbolic. It's a template that allows us to understand or predict how the concrete social mechanisms of valuation will work in practice, given the simple rule set and simple system scaling mechanism that we have described.

How will truly poor people without computers or training have crypto wallets and benefit from this?

It is the responsibility of every socially privileged user to act as a bridge to reach those who do not have enough privilege to have the means to maintain and operate cryptocurrency wallets, and to sell their UBI cryptocurrency into local forms of money that they can actually use.

One way this will work is that existing Basic Income programs such as the Quatinga Velho Basic Income Startup Fund run by ReCivitas can be activated to serve as a bridge between UBI cryptocurrencies in general and non-privileged (excluded, "poor") people. Volunteers can be funded to manage the UBI cryptocurrency wallets of those they serve, and they can be responsible for converting that cryptocurrency into money that is local to the recipients, and finally distribute that money to them or use the money in some other fashion (such as ReCivitas' Basic Income Startup funds that pay a perpetual income to people off of interest accrued by the fund).

Identification systems of network currencies should, therefore, require identification proceedings that are as inclusive as possible. Requiring "International Passports with Computer Chips" from users is probably not a good idea.

What if there's more "leechers" than givers?

There's no such thing as a "leecher." All human beings have an inalienable human right to a Basic Income. Whatever value that is given to the system is thus distributed equally among all, since all equally deserve it.

The question is whether those who can give the most power will give it or not. That is a cultural value that has to be nurtured in society. That will not happen unless the system is already running and inviting people to be generous.

The general availability of a reliable system that allows people to easily part with whatever trade power ("capital") that they possess and share it with "everyone else" (to the best of the system's ability to reach "everyone") creates a social responsibility to use that system to distribute that trade power. That is how "institutions," at least fully volunary ones, are born, and that's what "voluntary taxation" looks like.

What if truly bad people earn the capital I inject into the system?

The "bad people" (e.g. Nazis) argument is that by raising "bad people" out of poverty, we are empowering them to harm the world, and thus the very system that is feeding the bad people and everyone else. It's Karl Popper's Paradox of Tolerance.

But "bad people" as a social problem are a product of poverty. For example, the original Nazis from 1930's Germany were a product of unprecedented, evil, crushing sanctions and debt that was inflicted upon the German people by way of a disgusting diplomatic con job perpetrated by the English at the end of World War I. The current global fascist wave is a direct result of "austerity" (neoliberalism) being imposed everywhere. Where people have no economic security, there will be fascism and there will be "bad people."

So, if we want to eradicate poverty, we can and should eradicate poverty for all. It's not at all immoral of your part to fund an UBI if that UBI is going also to "bad people." On the contrary. If you want a Nazi to stop being a Nazi, giving them a Basic Income is our best bet. It's our best shot at a cure for the epidemics of "bad people."

What if I'm not satisfied with any of the existing implementations of the Democratic Money Network?

Then please publish your suggestions and/or implement your own anarchic democratic currency and add it to the network.

What if I'm not convinced?

Don't worry, that's OK.

What if other people are not convinced?

That's also OK.

What if almost no one is convinced?

Then there's that popular Margaret Mead quote.


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